UK-based company said set to buy Keter Plastics for $1.7 billion

Huge sale would break up ownership of Israeli furniture giant, giving up to 80% to buyout investor BC Partners

Raoul Wootliff is the Times of Israel's former political correspondent and producer of the Daily Briefing podcast.

A reclining beach chair produced by Keter. (Public Domain/Wikimedia)
A reclining beach chair produced by Keter. (Public Domain/Wikimedia)

A deal for London-based BC Partners to buy the Keter Plastics empire is reportedly in the final stages of completion, with a final price said set at a whopping $1.7 billion.

Under the sale, some 80% of the company has been purchased by BC Partners, which beat out a joint venture of CVC Capital Partners and Goldman Sachs in a bidding war, according to Israeli and international media sources.

“BC Partners has won exclusivity and is discussing the acquisition of a majority stake. The deal values the business at close to $1.6 billion,” a source told Reuters on Wednesday.

BC Partners is a private equity firm operating from London, Paris, Hamburg and New York and specializing in European buyouts and acquisitions. It has also bought a number of US companies.

Founded in 1948 in a small workshop in Jaffa, Keter has grown to become the world’s largest manufacturer of resin-based household and garden furniture. Its product range includes garden sheds, toolboxes, bathroom cabinets and backyard playhouses for children.

The company now operates 29 plants in Israel, Europe and the United States.

From its $880 million sales in 2015, Keter totaled a gross profit of $310 million, a 45% increase on its 2014 total, according to the Globes financial daily.

Sami Sagol (Courtesy)
Sami Sagol (Courtesy)

Keter owner Sami Sagol launched the sale last month with an asking price of $1.8 billion for 80% of the shares, Globes reported. One sticking point in the negotiations had been Sagol’s demand to keep open the factories based in Israel, which employ some 1,400 people, according to Channel 2 news.

As one of Israel’s largest manufacturers, Keter Plastics has in the past been a target of the Boycott, Divest and Sanction movement.

In March activists in Canada attempted to label all Keter merchandise with stickers warning consumers that the products were made in Israel. In 2013 the United Church of Canada’s governing General Council approved a boycott campaign, encouraging “economic action” against Keter Plastics along with the Israeli beverage maker SodaStream and cosmetics company Ahava.

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